A lot of people are still trying to get their head around Blockchain technology and now there’s a new kid on the block called NFT.
If you are still struggling with the concept of Blockchains beyond the trading of crypto currencies such as Bitcoin, Ethereum and others, we wrote a blog on How Blockchain may benefit Non-Profits which explains how this digital accounting ledger works and its potential benefits.
In its simplest form this is what a Blockchain is.
A ledger that keeps record of a digital token. An NFT, much like crypto currencies is also a token, hence NFT being an acronym for Non-Fungible Token.
What is an NFT exactly?
NFT is a non-fungible digital token.
What this means is that each token has a different value and no two tokens may necessarily have the same value. Although two tokens could coincidentally have the same value at any given time.
In traditional terms a house or a car would be regarded as non-fungible tokens as no two houses, once purchased, have the same fixed value. Same with a car or any other resaleable commodity.
In contrast to this, a Bitcoin is a fungible token.
One bitcoin = one bitcoin and the value is universal, based on the going rate of the day.
Traditional currencies are also fungible tokens of value. If I exchange a one hundred Rand note with your one hundred Rand note they are both still the exact same value.
This is why, if you’ve heard or read anything about an NFT so far, it seems to be connected mainly to digital art or some sort of digital media.
An NFT, like Bitcoin, is stored in a Blockchain ledger and is therefore traceable back to its origin.
Which is why digital media and/or art seems to be the forerunner to the myriad of ways NFTs could be used in the future.
So, if an artist creates an original piece of digital art, registers it as an NFT, this is then stored in a ledger and is recorded to be original and, importantly, traceable.
The common reaction to this concept is that with a piece of digital art one could simply screenshot the image or take a photo with your Smartphone, hence the scepticism of how a NFT could possibly retain its value.
This analogy helps one understand it better.
The Louvre Museum in France houses the original Mona Lisa. You can visit the Louvre and take a photo of the Mona Lisa or download an image of it off the internet but that does not mean you own the Mona Lisa. In a strange twist of fate, copying or sharing a piece of NFT registered digital art actually adds to its value as its cultural relevance grows.
It’s a lot to take in, especially since this new, virtual world has far from reached critical mass but, much like cryptocurrencies, the NFT concept has far wider reaching possibilities than just applying value to digital art.
NFT and storytelling – the future
Much has been said about the changing face of the consumer and how Generation Y & Z are becoming far more conscious consumers with a different set of expectations to previous generations.
If you scroll to the the bottom of this blog there are several links to articles that we have written on the subject.
Another huge paradigm shift that has occurred, specifically with the proliferation of social media and smart devices, is that audiences are jaded by traditional advertising methods.
Most of these methods are based on interruption, such as pop-up banners, TV commercials, YouTube video adverts and adverts on your Facebook or Instagram timeline.
Visual storytelling is the next evolution away from interruptive advertising.
When brands start to create their own short films or documentaries to tell their stories, this is when the audience’s guard comes down. When people don’t feel that they are being sold to, trust, affinity and brand-loyalty rises.
So, how does this tie in with NFTs?
Disinformation has impacted heavily in the digital realm and continues to do so.
This hazard also exists in the commercial world. Fake storytelling is deliberately designed to impact negatively on a brand’s product or service.
An example of this was the viral story reporting that a boy was killed by an Xbox One. Consider the potential brand damage this may have caused.
Data privacy and enhanced user privacy is coming under more and more scrutiny and a method to validate and track ownership of a story is long overdue. NFT may just be the type of digital regulator needed to enhance true authenticity of a viral story.
Protection of digital assets.
An NFT also provides a marketplace for a creator to list their digital asset and sell it using cryptocurrency. This means that the creator of the digital asset, for example a video, sells this token to the buyer who then has a registered ownership of the video as an asset.
Both the creator and buyer are protected as the original asset is recorded and traceable through the blockchain ledger. This means the creator cannot re-sell that asset to someone else, nor can the buyer without transferring the NFT which then changes ownership.
NFT represents a huge step forward in both authenticating digital assets and reducing piracy or abuse of media through verifiable ownership which could quite possibly represent a critical solution to regaining trust on the internet.
- What the F*ck are NFTs?
- NFTs could revolutionize marketing and communications
- A guide to visual storytelling Part 2: NFTs, ‘new’ social and the future of brand content
More great reads on the Bigger Than Me blog.
- Storytelling that doesn’t suck: beyond content marketing
- The power of a good story
- Eight questions every purpose-driven brand should ask
- What is Conscious Consumerism and why we should care?
- Consumers are changing and so are their choices